AROOP MUKHERJEE IND., Jaipur V. ITO, Jaipur

ITA 691/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2216 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 27-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JAIF JCIT DHK
• Keywords: Sale consideration of property below Jantri Value; Reason to believe
• Section: 50C; 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 691/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2005-06 AROOP MUKHERJEE, IND. HATHI BABU KA BAGH, STATION ROAD, JAIPUR. CUKE VS. THE INCOME - TAX OFFICER, WARD 3(2) JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFCPM 7904 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI PRAVEEN SARASWAT (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JAIF (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/01/2018 MN?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 05/01/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF LD. CIT(A), ALIGARH DATED 02.03.2016 PERTAINING TO THE ASSESSME NT YEAR 2005-06 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACTS ON RECORD THAT NOTICE U/S 148 WAS BASED ON WRONG FOUNDATION & DEFECTIVE. THE NOTICE ISSUED ON 26.03.2012 WAS BEYOND FOUR YEA RS, WHILE SO CALLED ESCAPEMENT OF INCOME WAS ONLY RS. 67,190/- A S MENTIONED IN REASONS OF ISSUE OF NOTICE U/S 148. HENCE INITI ATION OF PROCEEDINGS WAS ILLEGAL AND NOT JUSTIFIED. 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDIT ION OF RS. 2,87,252/- ON ACCOUNT OF LONG TERM CAPITAL GAIN (1/ 3 RD OF THE PROPERTY, 5, HATHI BANU KA BAGH, STATION ROAD, JAIP UR) ON BASIS OF WRONG FINDINGS OF AO, WHICH ARE SUB-JUDICE, WHIL E ASSESSEE HAS GIVEN COMPLETE DETAILS OF LAND & CONSTRUCTION ON BA SIS OF SALE 2 ITA NO. 691/JP/2016. SH. AROOP MUKHERJEE, JAIPUR. DEED FOR ASCERTAINING THE PROPER VALUATION, BUT SAM E HAS BEEN IGNORED BY LD. CIT(A). THUS, ADDITION MADE IS NOT JUSTIFIED. 3. THE ASSESSEE CAN ADD ALTER OR AMEND ANY GROUND O F APPEAL BEFORE HEARING OR DURING HEARING. 2. GROUND NO. 1 IS REGARDING TO VALIDITY OF REOPENING OF THE ASSES SMENT U/S 148. 2.1 LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT TO ASSESS THE LONG-TERM CAP ITAL GAIN OF RS. 67,190/- AS MENTIONED IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. THEREFORE, THE INITIATION OF PROCEEDING U/S 148 IS ILLEGAL IN VIEW OF THE PROVISION OF SECTION 149(1)(B) OF THE ACT AS THE AS SESSING OFFICER CANNOT REOPEN THE ASSESSMENT AFTER THE EXPIRY OF FOUR YEAR S WHEN THE INCOME ESCAPED ASSESSMENT IS LESS THAN RS. 1,00,000/-. TH US, THE AR HAS CONTENDED THAT ADMITTEDLY, THE AO HAS REOPENED THE ASSESSMENT FOR ASSESSING THE INCOME OF RS. 67,190/- WHICH IS NOT PERMISSIBLE. 2.2 THE LD. D/R HAS RAISED AN OBJECTION AGAINST THE GROUND NO. 1 OF ASSESSEES APPEAL AND SUBMITTED THAT NO SUCH OBJECT ION WAS RAISED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND THEREFORE ASSESSEE CANNOT RAISED A NEW PLEA AT THIS STAGE WITHOUT SEEKING THE LEAVE OF THE TRIBUNAL. SHE HAS FURTHER CONTENDED THE ASSESSING OFFICER SPECIFICALL Y STATED IN THE ASSESSMENT ORDER THAT THERE WAS A CALCULATION MISTAKE IN COMPU TING THE SHARE OF THE ASSESSEE IN THE INCOME ESCAPED ASSESSMENT AT RS. 67 ,190/- INSTEAD OF CORRECT 3 ITA NO. 691/JP/2016. SH. AROOP MUKHERJEE, JAIPUR. WORKING OF RS. 3,17,190/-. THE LD. D/R HAS CONTENDE D THAT THE ACTUAL INCOME WHICH IS 1/3 RD SHARE OF THE ASSESSEE IN THE CAPITAL GAIN ESCAPED ASSESSMENT IS RS. 3,17,190/- IS MORE THAN RS. 1,00,000/- AS PROVI DED U/S 149(1)(B) OF THE ACT. SHE RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 2.3 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. AS FAR AS THE OBJECTION OF THE LD. D/R THAT THE ASSESSEE CANNOT RAISE THE FRESH GROUND / PLEA FIRST TIME BEFORE THI S TRIBUNAL WE FIND THAT THE ASSESSEE TOOK THIS OBJECTION IN HIS REPLY FILED TO THE NOTICE U/S 148 WHICH HAS BEEN REPRODUCED AT PAGE 2 TO 3 OF THE ASSESSMENT OR DER WHEREIN THE SPECIFIC OBJECTIONS HAS BEEN TAKEN BY THE ASSESSEE IN PARA 5 OF THE REPLY AS UNDER:- 5. THAT YOU HAVE MENTIONED THAT INCOME TO EXTENT TO RS . 67,190/- HAS BEEN ESCAPADE DURING THE YEAR UNDER CONSIDERATI ON, WHILE INITIATION OF PROCEEDING ARE BAD IN LAW IN VIEW OF SEC. 149(1)(B) OF I.T. ACT, READS AS UNDER: SE. 149(1)(B) IN FOUR YEARS, BUT NOT MORE THAN SIX YEARS HAVE EL APSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCO ME CHARGEABLE TO TAX, WHICH HAS ESCAPED ASSESSMENT AMO UNTS TO OR IS LIKELY TO BE AMOUNT TO ONE LAKH RUPEES OR MORE F OR THAT YEAR. THUS WHOLE PROCEEDING INITIATED IS BAD IN LAW. SO PROCEEDINGS IMITATED MAY KINDLY BE DROPPED. THUS, IT IS CLEAR FROM THE REPLY AS REPRODUCED BY T HE AO THAT THE ASSESSEE TOOK THIS OBJECTION THAT THE INCOME TO THE EXTENT O F RS. 67,190/- WAS BELIEVED 4 ITA NO. 691/JP/2016. SH. AROOP MUKHERJEE, JAIPUR. TO HAVE ESCAPED ASSESSMENT AS PER THE REASONS RECOR DED AND THEREFORE INITIATION OF PROCEEDING U/S 148 ARE BAD IN LAW IN VIEW OF SECTION 149(1)(B) OF THE I.T. ACT. THEREFORE, WE DO NOT SEE ANY SUBSTANC E IN THE OBJECTION RAISED BY THE LD. D/R THAT THE GROUND NO. 1 OF THE ASSESSE ES APPEAL IS A FRESH GROUND AND FIRST TIME TAKEN. AS REGARDS THE CALCULA TION MISTAKE IN SHARE OF ASSESSEE, WE FIND THAT THE AO HAS RECORDED THE REAS ONS FOR REOPENING OF THE ASSESSMENT AS UNDER:- REASON FOR THE BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT. NAME OF SELLER NAME OF PURCHASER PROPERTY DT. OF REGISTRATION FACE VALUE EVALUATED VALUE BY SUB REGISTRAR DIFFERENCE. AROOP MUKHERJEE (1/3 RD SHARE) 1.CHAMPA LAL JAIN 2. PREM DEVI 5, HATHI BABU KA BAGH, STATION ROAD, JAIPUR. 25.2.2005 7,50,000 9,51,570 1/3 OF 2,01,570= RS. 67,190 RS. 67,190 AS PER RECORDS OF THIS OFFICE THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME-TAX FOR A.Y. 2005-06. LOOKING TO THE FACTS MENTIONED ABOVE, I HAVE REASON TO BELIEVE THAT THE INCOME TO THE EXTENT OF RS. 67,190/- HAS ESCAPED AS SESSMENT WITH THE MEANING OF SECTION 147/148 OF THE IT ACT, 1961. I, THEREFORE, HEREBY ISSUE NOTICE U/S 148 OF THE I.T. ACT, 1961 FOR THE ASSESSMENT YEAR 2005- 06. 2.4 THUS, THE INITIATION OF THE PROCEEDING U/S 148 IS BASED ON THE REASONS RECORDED BY THE AO AND SUBSEQUENT MODIFICATION OR I MPROVEMENT OF THE INCOME ESCAPED ASSESSMENT CANNOT BE TAKEN INTO CONS IDERATION FOR THE 5 ITA NO. 691/JP/2016. SH. AROOP MUKHERJEE, JAIPUR. PURPOSE OF DECIDING THE ISSUE OF VALIDITY OF INITIA TION OF PROCEEDINGS U/S 148 OF THE ACT. THE ASSESSING OFFICER HAS FORMED THE BELI EF AS PER THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AND THEREF ORE NOTHING OTHER THAN THE REASONS RECORDED BY THE AO CAN BE CONSIDERED AS BASIS FOR REOPENING OF THE ASSESSMENT. EVEN OTHERWISE THE WORKING OF THE SHARE OF THE ASSESSEE IN THE CAPITAL GAIN ARISING FROM TRANSFER OF THE PROPE RTY IS BASED ON THE DEEMED FULL VALUE CONSIDERATION AS PER THE PROVISIONS OF S ECTION 50C OF THE ACT AND NOT AS PER THE ACTUAL SALE CONSIDERATION RECEIVED BY TH E ASSESSEE. HENCE, FOR THE PURPOSE OF JURISDICTION OF THE ASSESSING OFFICER TO INITIATE THE PROCEEDINGS U/S 148, ONLY THE REASONS RECORDED FOR REOPENING ARE TO BE CONSIDERED AS RELEVANT. THERE IS NO DISPUTE THAT ASSESSING OFFICE R HAS STATED IN THE REASONS RECORDED THAT THE INCOME OF RS. 67,190/- ASSESSABLE TO TAX BEING CAPITAL GAIN WAS ESCAPED ASSESSMENT. THE PROVISION OF SECTION 1 49(1) SET OUT CERTAIN PRE CONDITIONS FOR ISSUING THE NOTICE U/S 148 WHICH REA DS AS UNDER:- TIME LIMIT FOR NOTICE. 149. [(1) NO NOTICE UNDER SECTION 148 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR,- [(A) IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE CASE FALLS UNDER CLAUSE (B) [OR CLAUSE(C)] (B) IF FOUR YEARS, BUT NOT MORE THAN SIX YEARS, HAV E ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCO ME 6 ITA NO. 691/JP/2016. SH. AROOP MUKHERJEE, JAIPUR. CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOU NTS TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE FOR THAT YEAR,] [(C) IF FOUR YEARS, BUT NOT MORE THAN SIXTEEN YEARS , HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME IN RELATION TO ANY ASSET (INCLUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA, CHARGEABLE TO TAX, HAS ESCAP ED ASSESSMENT.] EXPLANATION.- IN DETERMINING INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT FOR THE PURPOSE OF THIS SUB-SECT ION, THE PROVISIONS OF EXPLANATION 2 OF SECTION 147 SHALL APPLY AS THEY APPLY FOR THE PURPOSES OF THAT SECTION.] IN CASE THE NOTICE ISSUED UNDER SECTION 148 OF THE I.T. ACT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR THAN AS P ER CLAUSE (B) OF SECTION 149(1), THE SAID NOTICE IS ISSUED AFTER FOUR YEARS BUT NOT MORE THAN SIX YEARS, THEN THE AMOUNT OF INCOME CHARGEABLE TO TAX WHICH H AS ESCAPED ASSESSMENT SHOULD NOT BE LESS THAN RS. 1,00,000/-. IN THE CASE IN HAND, UNDISPUTEDLY THE NOTICE U/S 148 WAS ISSUED ON 29.03.2012 WHICH IS AF TER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER CON SIDERATION AND BEFORE THE EXPIRY OF SIX YEARS AND THEREFORE NO NOTICE U/S 148 SHALL BE ISSUED UNLESS THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSE SSMENT IS RS. 1 LACS OR MORE. IN THE REASONS RECORDED BY THE AO THE INCOME IS UNDISPUTEDLY PROPOSED TO TAX IS ONLY RS. 67,190/- AND THEREFORE IN VIEW OF THE EMBARGO PUT BY SECTION 149(1)(B) THE NOTICE ISSUE U/S 148 IS NO T VALID AS THE SAME IS 7 ITA NO. 691/JP/2016. SH. AROOP MUKHERJEE, JAIPUR. BARRED BY LIMITATION. HENCE, THE AO HAVING NO JURIS DICTION TO ISSUE NOTICE U/S 148 BASED ON THE REASONS RECORDED FOR THE REOPENING OF THE ASSESSMENT. ACCORDINGLY, THE NOTICE ISSUED U/S 148 IS QUASHED B EING ILLEGAL WITHOUT ANY JURISDICTION AND BARRED BY LIMITATION AND THEREFORE THE CONSEQUENTIAL REASSESSMENT IS ALSO LIABLE TO BE QUASHED. 2.5 SINCE, WE HAVE QUASHED THE REOPENING OF THE ASS ESSMENT THEREFORE; WE DO NOT PROPOSE TO GO INTO THE GROUND NO. 2 ON THE MERIT OF THE ASSESSMENT. 3. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 05/01/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 05/01/2018. POOJA/- VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. AROOP MUKHERJEE, IND., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD 3(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE [ITA NO. 691/JP/2016] VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 8 ITA NO. 691/JP/2016. SH. AROOP MUKHERJEE, JAIPUR.